How housing in America became a four-letter word

Experts are baffled that so many Americans in their prime home-buying years of 25 to 34 are opting to rent rather than buy. The villain? While some blame out-of-control student loan payments, the soaring cost of rent is an even bigger hindrance to buying a home. Most cities with booming job markets feature sky-high rents, with some residents paying close to 40% of their gross income to afford it.

So, why does housing have to cost so much? Like most everything in the U.S., housing is subject to market demands, so how did the pendulum swing so hard in one direction? What makes a place go from a normal neighborhood to a hot one? And can’t people who want to pay less just move somewhere cheaper?

The problem is that there are fewer and fewer places with affordable housing and jobs aplenty. Historically, smaller cities like Austin, Texas, as well as Houston and Atlanta, offered relief from big city prices. But now even these smaller locales are feeling the pinch.

The numbers just don’t add up. According to the Census Bureau, the median household income in the United States in 2014 was $53,657. A federal guideline says housing is affordable as long as it eats up 30% of gross income, or less. That means the median American family should spend no more than $1,341 a month on rent or mortgage payments.

But cities have long defied this math. In Manhattan, for instance, the median household income is $66,000. Applying the 30% guideline means housing should cost no more than $1,650 per month. But the median cost of a one-bedroom apartment there is now more than twice as high, at $3,405 a month. In San Francisco, the median household income is $77,000, suggesting that housing should cost no more than $1,925 per month. But the median monthly one-bedroom rental costs $3,500.

In Washington, D.C., the median income is $77,000 a year for a single person and $90,000 for a household, and the median one-bedroom rent is $2,000 a month. It’s affordable for middle-of-the-road earners, but people below that line are struggling to pay for groceries or daycare in a city where a household making $60,000 a year could qualify for a housing subsidy.

These numbers are depressing but perhaps not surprising: A metropolis is a hub for jobs, entertainment, and opportunity. Astronomical rent is part of the cost of participating. But housing affordability issues are bleeding over into smaller cities as well.

Take Austin, Texas. The city now has an average rent of $1,130 for a one bedroom, which may seem reasonable to people accustomed to rents that are two or three times as high. It’s also affordable based on the local median income of $53,946 per year. But there are still economic mobility issues in its African American population stemming from a deeply segregated past.

Detroit needs revitalization to fight its way back from its 2013 bankruptcy, but racial schisms are leaving many long-time business owners out in the cold. Meanwhile, Portland, Oregon, has been dubbed the most gentrified city of the century. Even viral sensations aren’t immune: a beloved bakery in New York City known for “Nutellasagna” recently packed up and moved to Baltimore because it couldn’t keep pace with the rising cost of rent, property taxes, and city fees.

Gentrification is a loaded term, normally conjuring images of a Starbucks, Whole Foods market, and artisanal anything.  Proponents prefer the term “revitalization”—the idea that a run-down area can be built up as a commercial or residential hub, with a better living experience and more money for city and state coffers.

But with those kinds of economic changes come unintended consequences like heavy demographic shifts. San Francisco’s Mission District may no longer be a hub for Latinos in the Bay Area, and could signal a loss of cultural heritage and historical sites. In Minneapolis, increased prosperity in the city is pushing poverty to the suburbs. Bucolic Boulder, Colorado, with its outdoors culture and laid-back lifestyle, is now feeling the same tech-based culture shock as San Francisco and Seattle did years ago.

This process raises many important questions. If gentrification is ultimately to benefit a city, why do so many people fear it? What’s the difference between gentrification and revitalization? What role does urban planning play in how a neighborhood flips? How does an influx of foreign capital and private equity shape the landscape? Why are there waitlists for affordable housing units while most new buildings are focused on luxury housing? Where do people go when the city and the suburbs are too expensive?

And the largest question of all: Is it possible for any of these projects to truly benefit a whole community?

In a new series called Questioning Gentrification, I’ll explore the ins and outs of this process, trying to figure out how everything got so expensive and how we all got so broke. I’ll also try to find out whether it’s possible to build cities and suburbs that are economically productive, trendy, and affordable. As America becomes increasingly urban, this is the signal question of our time—after all, it’s not like we can start over on Mars.